No premium on FSI-free areas on rehab units of Mhada colonies: Bombay HC – Hindustan Times

Holding that no premium is payable on floor space index (FSI)-free areas like staircase lobby, lift lobby of rehabilitation components in the redevelopment of Maharashtra Housing and Area Development Authority (Mhada) colonies for economically weaker sections (EWS), low-income group (LIG) and middle-income group (MIG) categories, the Bombay high court on Friday directed the Brihanmumbai Municipal Corporation (BMC) to refund ₹27 crore accepted by the civic body from a city developer towards premium.

The division bench of justices RD Dhanuka and Madhav Jamdar passed the order on a petition filed by the developer, SD Corporation, which is redeveloping Samta Nagar colony at Kandivli (East) that is spread over 2,13,867 square meters area and comprises 165 buildings of 65 cooperative housing societies.

The developer had moved HC in 2016 after the deputy chief engineer of BMC’s building’s proposal department rejected their plea for exemption from payment of premium on certain FSI-free areas in terms of Regulation 33(10) and some other provisions of the development control regulations (DCR) for Mumbai.

The deputy chief engineer had rejected the plea in April 2016 on the ground that there was no provision in the DCR which exempted reconstruction from payment of premium towards FSI-free areas.

On October 12, 2017, HC admitted the petition for final hearing and by way of interim order directed BMC to grant occupation certificate to four wings of a rehabilitation building, whose construction was completed by then, subject to the developer submitting an undertaking that they will pay the premium if their petition failed.

BMC had then carried the matter to the Supreme Court and under the orders of the Apex Court, the developer had to deposit amount of ₹27 crore, which was later allowed by the Court to be withdrawn by BMC.

As regards the exemption from paying a premium, it was submitted on behalf of the developer that under Clause 6 of Regulation 33(5), all the relaxations, exemptions or benefits enumerated under Regulation 33(10) of the DCR in respect of slum rehabilitation projects were also available to the redevelopment of Mhada colonies, under Regulation 33(5) of the DCR.

HC accepted the argument and held that the developer was not liable to pay the premium. “Clause 6 of Regulation 33(5) begins with a non-obstante clause which makes it clear that notwithstanding anything contained in DCR, the relaxation incorporated in Regulation 33(10) shall apply to the housing schemes under Regulation 33(5) for construction of tenements under EWS or LIG and MIG categories,” said the bench.

The bench added that the rejection of the developer’s application for exemption from payment of premium was “ex-facie untenable and contrary to the plain reading of Clause 6 of Regulation 33(5) read with other regulations of the DCR.

“Unless a specific provision for levy of premium under any provision of the Development Control Regulations is made, the respondent no.1 (BMC) could not have demanded any such premium from the petitioners without the authority of law and in violation of Article 265 of the Constitution of India,” said the bench. “On the other hand, since there was a specific

provision for relaxation in payment of premium, the respondent no.1 could not have refused the said relaxation by interpreting the said provision differently.”